Tesla Shares Tumble After Huge Q1 Delivery Miss and Potential Trouble Ahead
1min read Tesla shares tumble after reporting a much steeper decline in Q1 deliveries, falling well below estimates, as Elon Musk's deep involvement in politics backfires on the company's sales.
The stock drops more than 5% following the news.
The EV giant delivered 336,681 vehicles in the first quarter, marking a 13% year-over-year decline and significantly missing the 400K estimate. Meanwhile, tesla produced 362,671 vehicles, raising concerns about surplus inventory.
Tesla attributed the decline to the transition of Model Y production lines across all four factories, which led to several weeks of lost output. The company noted that the ramp-up of the new Model Y is progressing well. However, protests in the U.S. and Europe, along with intense competition in China, are adding to Tesla's troubles.
But production issues may not be the biggest concern. Tesla has faced waves of protests, boycotts, and even criminal activity targeting its vehicles and facilities, largely in response to Musk's political rhetoric and his role in integrating DOGE as part of President Trump's second administration.
Ask Aime: What caused Tesla's Q1 deliveries to plummet, and how will this affect future sales and stock performance?
Sales in Europe have also plunged, with year-over-year declines estimated at around 50% due to the growing public backlash against Tesla. Musk's controversial comments on global affairs, including the German election, have fueled widespread disapproval. Additionally, Trump's tariff threats have exacerbated anti-Tesla sentiment worldwide, given Musk's strong endorsement of Trump.
Musk has admitted that his involvement in DOGE is significantly impacting Tesla's stock and hinted at returning to focus on the company as early as May. However, uncertainties remain.
Meanwhile, Trump is set to announce a global reciprocal tariff policy on Wednesday, and his close ties with Musk could further damage Tesla's sales outlook.
